130 Million People at Risk of Poverty Due to Rising Prices

UNDP Administrator Achim Steiner warned that rising energy and food prices, along with higher borrowing costs, coupled with climate risks and declining international aid, threaten to push millions of people into poverty, as developing nations' capacity to support their populations and face successive crises diminishes.

Speaking to AFP on the sidelines of IMF and World Bank meetings in Bangkok, Steiner said fragile economies need additional funding and time to restore their resilience against shocks, after consecutive crises have drained their financial resources.

He explained that global fuel prices have risen since the outbreak of the US war on Iran in late February, followed by disruptions in oil and gas supplies, which increased pressure on energy-importing countries.

These developments come amid accumulated debt and fiscal deficits since the 2008 global financial crisis, the repercussions of the COVID-19 pandemic, and the wars in Ukraine and the Middle East.

According to a recent UNDP report, approximately 130 million people may face the risk of falling into poverty during the current year if increases in energy and food prices are fully passed on to consumers without government support.

Southern Asia, Eastern Asia, and Sub-Saharan Africa are the regions most vulnerable to these impacts.

High borrowing costs exacerbate the crisis, as developing nations pay more for financing while bond yields rise in advanced economies.

The average developing country allocates about 9.5 percent of its government revenue to interest payments, the highest rate in 25 years, exceeding three times the level recorded in high-income countries.

The UN agency also warned that the sharp decline in international aid makes it harder to finance essential services and cope with rising prices, while the El Niño phenomenon threatens floods, droughts, and harsh climatic conditions that could peak in early 2027.

Steiner called for mobilizing additional investments from developed countries, multilateral institutions, and the private sector to boost growth, create jobs, and help developing economies build resilience against crises.